Illegal ADU on an FHA order

[Dublin ohio]

Characteristics of Property Improvements (II.D.3.b.vii)(E) Accessory Dwelling Unit(1) Identification of an Accessory Dwelling Unit An Accessory Dwelling Unit (ADU) is subordinate in size, location,and appearance to the primary Dwelling Unit and may or may not have separately metered utilities. The ADU must comport with zoning requirements, which may include a legal nonconforming use

.(2) Required Analysis and Reporting Protocols As part of the highest and best use analysis, the Appraiser must maket he determination to classify the Property as a Single Family dwelling with an ADU, or a two-family dwelling. The conclusion of the highest and best use analysis will then determine the classification of the Property and the required analysis reporting

.(a) One-Unit Single Family Dwelling with an Accessory Dwelling Unit When the highest and best use analysis determines the Property to be a Single Family dwelling with an ADU, the Appraiser must:• provide a description of the ADU characteristics;• summarize the ADU’s market acceptance;• report the Gross Living Area (II.D.3.c) of the ADU separate from the primary dwelling;• state whether the ADU can be legally rented without restrictions; and• report the current ADU occupancy and the relevant details of any known lease agreements.

 

[Tiffany Gibbons]

I think what Tom posted was from several different lenders and not directly from FHA 4001. If I am incorrect, sorry Tom, please confirm. I could not find anything in 4001 D on the OP question. That is why I said to contact HUD on this grey issue. Better safe than sorry. Lenders can go above and beyond as to what FHA requires.

Here is from a different lender...

https://www.huduser.gov/portal/publications/adu.pdf

Yeah, I had looked all through the 4001 and couldn't find it either. It's stupid.

 

[Tom4value]

I think what Tom posted was from several different lenders and not directly from FHA 4001. If I am incorrect, sorry Tom, please confirm. I could not find anything in 4001 D on the OP question. That is why I said to contact HUD on this grey issue. Better safe than sorry. Lenders can go above and beyond as to what FHA requires.

Here is from a different lender...

https://www.huduser.gov/portal/publications/adu.pdf

You are correct. This was not from the handbook.

 

[Tom4value]

did you ask the client if you could discuss their confidential appraisal with zoning people. that's like an attorney discussing private info with the other side. couldn't have done it without the address.
USPAP say only if subpoenaed by a legal entity. were you. i the owner, and i'm asking the lender why you give out this private info, cause it was not public. and now you created a problem, when there wasn't any.

Factual information is NOT confidential and NOT subject to the confidentiality rule of USPAP, only your opinions/conclusions. The subject address and even disclosing what is there is factual information.

 

[Dublin ohio]

Factual information is NOT confidential and NOT subject to the confidentiality rule of USPAP, only your opinions/conclusions. The subject address and even disclosing what is there is factual information.

Maybe, maybe not. If the fact that the property had an illegal ADU was not available anywhere else. You might find yourself in a rather "sticky" legal situation.

 

[Tiffany Gibbons]

Email the below, and someone from HUD will reach out or even call you. Put in the subject line "appraisal question".
answers@HUD.gov

I then copy and paste what HUD said in the report, the date of the response, etc. This covers me from the DEU and if the report ever gets reviewed by HUD. I have never had a DEU to overwrite what HUD said.

When you hear back from HUD, post it hear.

I've emailed them before and got an immediate answer back too. Then forward the answer to the lender.

 

[NC Appraising]

n-Person: FHA Appraiser & Appraisal Training – Greensboro, NC​ April 17, 2024 │ 9:00 AM – 4:00 PM (Eastern)​

This free, in-person training will provide an overview of FHA appraisal protocol and updates to FHA appraisal policy as outlined in the FHA Single Family Housing Policy Handbook (Handbook 4000.1). This training will also take an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements; and more. Who Should Attend: FHA appraisers and other industry professionals including underwriters and processors will also benefit from this training. Jurisdictional Host: Atlanta Homeownership Center Event Location: Ashville Building 1500 Pinecroft Road Suite 401 Greensboro, NC 27407-3838 Instructions: Advance registration is required by April 12, 2024. Check-in begins at 8:30 AM. Due to space limitations, registration is on a first -come, first-serve basis. This training is being held in a government facility. Attendees must provide a valid, government-issued photo I.D. at the guard station. Please allot for time to gain access to the building. For more information, contact Krystal.goode-raines@HUD.gov

 

[NC Appraising]

I did find this:

https://answers.HUD.gov/FHA/s/knowledgearticledetail?recordId=ka03d0000001OfeAAE

An Accessory Dwelling Unit (ADU) refers to a single habitable living unit with means of separate ingress and egress, that meets the minimum requirements for a living unit (Handbook 4000.1 II.A.3.a.ii(F)). An ADU is a private space that is subordinate in size and can be added to, created within, or detached from a primary one-unit Single Family dwelling, which together constitute a single interest in real estate.

A Single Family residential one-unit Property with a single ADU remains a one-unit Property. For any Single Family residential Property with two or more units, a separate additional Dwelling Unit must be considered as an additional unit.

The ADU must be legally permissible under the zoning, which may include a legal nonconforming use.

For more information see:

• Handbook 4000.1 Section II.A.1.b.iv(B)(4) and II.D.3.b.vii at https://www.HUD.gov/program_offices/administration/hudclips/handbooks/hsgh
• Mortgagee Letter 2023-17 at https://www.HUD.gov/program_offices/administration/hudclips/letters/mortgagee

https://www.HUD.gov/sites/dfiles/OCHCO/documents/2023-17hsgml.pdf

 

[Tom4value]

Maybe, maybe not. If the fact that the property had an illegal ADU was not available anywhere else. You might find yourself in a rather "sticky" legal situation.

Factual information is just that, factual. It doesn't matter who presently knows about it. It is there. The Building Inspector can find out without the appraiser. Also, the fact that I had permission to see it releases me from any liability.

Not my personal opinion. This was from a USPAP class I took on this very subject.

 

[alebrewer]

Dealing w/a duplex now that was grandfathered when they changed to SF zoning, but cannot be rebuilt without obtaining a variance from the city. I'm sure that's going to twist some heads off, but thankfully they can't shoot the messenger.

On second thought - I guess they can shoot the messenger if they can track me down...